Summer is here which means everyone ( or most of us ) will be checking in to a cottage to stay for the week ( or weekend!). Some cottages have been passed down through family, or some have been used for investments.
People from the Greater Toronto Area (GTA) and beyond are discovering the benefits of Ontario’s cottage country. Over the summer, they’ve been buying properties to use as short-term rentals.
Cottage country is currently such a hot market for short-term rentals many people believe it may be feasible to own a cottage in Northern Ontario and earn enough rental income to pay both their mortgage and Toronto rent!
When it comes to investing in real estate, investing in a cottage can be a risky move. When you buy a cottage, recouping your investment expenses can be a challenge.
A cottage can only be financed if it meets the criteria of a primary residence. As a result, the cottage will need a foundation in the ground rather than cinder blocks. Furthermore, the cottage will need a heated water line and a furnace.
There is no maintenance on the roads in cottages with seasonal zoning during the winter months. Therefore, they are nearly inaccessible once the first heavy snowfall arrives each year.
Property owners with hydro easements are responsible for maintaining local electrical lines on their property and letting anyone with hydro access the property at any time. It will be necessary for you to do some research in order to locate unregistered easements.
Several cottage communities are restricting short-term cottage rentals, particularly through online sites like Airbnb, especially around Lake Muskoka. Your short-term rental property may also be hindered by zoning restrictions and noise laws.
The cost of cottage insurance can be high, especially if the cottage is located far from a fire station. Before you make a purchase, get an estimate of the insurance premiums. You may end up paying too much for insurance if you buy a cottage without first evaluating insurance costs.
As a result, it’s important to plan your investments, especially when it comes to a cottage. Summer is here, and for many people, a cottage is a necessity for families. The Cottage can be fun, but if the fun is crucial to your family, then investing might help you.